Economics
University of Nairobi Environmental Economists Question Discussion

University of Nairobi

Question Description

I’m studying for my Economics class and don’t understand how to answer this. Can you help me study?

Chapters 5, 6, 7

1. Assume we have a fixed supply of a depletable resource to allocate between two periods.

Also assume that the demand function is the same in each of the two periods,

given by the formula P = 4 – 0.2q, and the marginal cost of supplying the resource is constant at $1 per unit. Now, assume the available supply of the resource q is 10 units, and the discount rate is 10%.

What is the dynamically efficient allocation of this resource? Show your work.

2. Explain how the premise of Rawls’ work A Theory of Justice applies to the concept of sustainability criterion.

3. Explain what the Hartwick Rule is and provide your opinion as to whether you think the literal interpretation of this rule represents a realistically achievable sustainability objective.

4. Explain the differences between current reserves and potential reserves, and explain the fundamentals behind how potential reserves can become current reserves.

5. Provide a real world example of a (current, historic, or potential) example of a “switch point” in our society, and explain why it might occur.

6. When the marginal user cost of resource extraction declines over time, marginal user cost _____________.

Why?

7. Does the advent of fracking increase net benefits to society? Why or why not?

8. What are the current problems with using nuclear sources (i.e. uranium) as a potential transition fuel from conventional fossil fuels in power generation?

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Final Answer

hello, find attached. let me know if you would prefer any editing. goodbye

Running head: ENVIRONMENTAL ECONOMISTS QUESTION

Environmental Economists Question

Name:
Institution:
Date

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ENVIRONMENTAL ECONOMISTS QUESTION

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Environmental Economists Question
Question 1
Now, if we put P=1,
Then, 1=4 – 0.2q.
0.2q = 3, therefore
Q = 3/0.2 * 10
= 15
Therefore demand = 15 units, and available supply = 10 units.
Now, when price =? , when q = 10
Therefore, P = 4 – (0.2*10)
=4–2
P = $2 per 1 unit
So, for the dynamic allocation of resources, that is q = 10 units and the price should be $2 per 1
unit to offset the excess demand of 5 units.
Question 2
The theory of justice by Rawl's presents a framework for sustainable development due to
its great influence on political theory and theories of intergenerational equity in particular. The
theory maintains that continual improvement in the material standard of living of the vulnerable
groups in the society is not a part of justice. However, justice does not need a minimum social

ENVIRONMENTAL ECONOMISTS QUESTION

3

level of income or wealth. If justice needs an exponential development in the material standard
of living, then the sustainable development would not be comp...

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